ASX Rebounds with Strong Gains Led by Miners and Banks

September 10, 2024 12:09 PM AEST | By Team Kalkine Media

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ASX Rebounds with Strong Gains Led by Miners and Banks — Image source: shutterstock

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Australian shares showed a notable rebound at the start of trading on Tuesday, tracking a rally from Wall Street and recovering from last week’s sell-off. The benchmark S&P/ASX 200 Index climbed 0.6% or 44.4 points to reach 8,032.5, driven primarily by gains in the banking and mining sectors.

Sector Performance

All 11 sectors of the ASX 200 experienced an uptick, reversing a decline of 0.3% observed on Monday. The recovery was significantly supported by major banks and mining companies, reflecting improved market sentiment and higher commodity prices.

Among the top gainers on the index were Polynovo Ltd (ASX:PNV), a specialist in burns treatment, and gold miners such as Emerald Resources Ltd (ASX:EMR) and De Grey Mining Ltd (ASX:DEG). Polynovo's share price saw significant gains, buoyed by positive investor sentiment towards the company's growth prospects. Emerald Resources and De Grey Mining also benefited from rising gold prices, which held steady at $2,505.25 per ounce, as traders awaited a key U.S. inflation report expected on Wednesday. This report will provide insights into the Federal Reserve's potential interest rate moves.

Banking Sector Highlights

The banking sector was particularly strong, with major banks such as Commonwealth Bank of Australia (ASX:CBA) and Macquarie Group Ltd (ASX:MQG) each climbing around 1% to hit all-time highs. UBS analysts have recommended favoring banking stocks over mining stocks, suggesting that banks are likely to better maintain their valuations amid current market conditions.

Mining Sector Movements

In the mining sector, major players also enjoyed a boost. BHP Group Ltd (ASX:BHP) saw a rise of 0.7%, while Rio Tinto Ltd (ASX:RIO) added 1%. This increase came on the back of a rebound in iron ore prices, which surged above $90 per barrel. The rise in iron ore prices is attributed to expectations of fresh economic stimulus from China, a key consumer of iron ore. Fortescue Metals Group Ltd (ASX:FMG) also recorded a modest gain of 0.5%.

Stocks in Focus

Despite the overall positive movement, some stocks faced declines. Eagers Automotive Ltd (ASX:APE), Bluescope Steel Ltd (ASX:BSL), and News Corp (ASX:NWS) saw their shares drop as they traded ex-dividend. Investors often adjust their positions when stocks go ex-dividend, leading to fluctuations in share prices.

The ASX 200's rebound reflects a cautious optimism among investors, buoyed by stronger performances from key sectors and anticipated economic developments.

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